Business News
Focus Media Announces Agreement to Combine its Digital Out-of-Home Business With SINA
Monday 22. December 2008 - Focus Media Holding Limited (NASDAQ:FMCN), China's leading multi-platform digital media company, today announced it has entered into a definitive agreement with SINA Corporation (Nasdaq GS: SINA), a leading online media company and value-added information service provider for China and for global Chinese communities, that SINA will acquire substantially all of the assets of Focus Media's digital out-of-home advertising networks, including LCD display network, poster frame network and in-store network.
Focus Media will retain its Internet advertising division, the movie theater advertising network portion of its commercial location network and certain traditional billboards.
“The transaction is intended to combine the forces of two of the most powerful new media advertising platforms in China to provide more effective and integrated marketing solutions to our customers,” said Charles Chao, President and CEO of SINA Corporation. “We believe that this business combination will significantly extend our media reach and influence, reinforcing our position as a partner of choice in new-media advertising in China.”
Tan Zhi, Chief Executive Officer of Focus Media commented, “Over the years we have built the largest and most influential out-of-home advertising network in China, reaching over 150 million main stream urban consumers on a daily basis. Joining forces with SINA will allow both companies to achieve cross fertilization of capabilities, leveraging SINA’s content strength and our video advertising capabilities. We are confident that the synergies of the combined business will allow us to provide better services to our advertising customers and be more competitive in China’s new media space.”
The transaction has been approved by both boards of directors and is not subject to shareholder approval. The transaction is subject to customary closing conditions and certain regulatory approvals and is expected to be completed in the first half of 2009. Under the agreement, SINA will acquire the assets under Focus Media’s LCD display network, poster frame network and in-store network. The related business of the acquired assets combined accounted for 52% of revenues and 73% of gross profits for Focus Media for the first nine months ended September 30, 2008. SINA will issue 47 million newly issued ordinary shares to Focus Media Holding as consideration for the acquired assets. Focus Media Holding will then distribute SINA shares to its shareholders shortly after the closing.